UBI charts recovery route

A STAFF REPORTER

Action time

Calcutta, Feb. 22: The United Bank of India (UBI) is planning to improve its financial health in the March quarter. The bank’s board of directors met today to discuss a turnaround strategy that involves containing fresh slippages and focusing on more recovery.

The board meeting, though previously scheduled, comes a day after the UBI’s chairman and managing director Archana Bhargava resigned from her post. The two executive directors of the bank are now in charge till the finance ministry appoints a new chairperson.

“The board today discussed a turnaround strategy. Even though in the last two quarters our net profit was hit because of higher provisioning, the bank was earning operating profit. So, we cannot say that the bank is weak,” Sanjay Arya, UBI executive director, told The Telegraph.

He said the bank would now focus on containing fresh slippages and stress on more recovery for the March quarter, which would lower the requirement of provisioning and, thus, add to the net profit.

The city-based bank had registered a sharp rise in fresh slippages to Rs 2,470.47 crore in the September quarter from Rs 1,200.05 crore in the quarter ended June. Fresh slippages increased to Rs 3,172.14 crore for the quarter ended December.

This resulted in the bank’s gross non-performing assets (NPAs) increasing sharply to Rs 8,545.50 crore for the December quarter, which is about 10.82 per cent of the advances. The bank’s bottomline was dented as it had to provide for the rising bad assets.

A large part of the rise in NPA — the highest among public sector banks — was because of the classification of assets and a disagreement between the former chairman and senior bank officials.